Washington, DC, July 28--The House narrowly approved a controversial trade agreement with Central America early Thursday, handing President Bush a hard-fought trade victory.
The House's 217-215 vote was the final and toughest hurdle for the Central American Free Trade Agreement, or Cafta, which will eliminate tariffs and other trade barriers between the United States, Nicaragua, Costa Rica, Honduras, El Salvador, Guatemala and the Dominican Republic.
"We have a moral obligation and a vital national security interest in helping the democracies of Central America and the Dominican Republic succeed, and Cafta furthers that goal. I look forward to signing this important legislation into law," Bush said in a written statement.
Democrats, including many who had voted for previous trade agreements, were largely united in opposition to the pact. They charged that the pact offered inadequate labor standards, which will undermine U.S. manufacturers and encourage the migration of U.S. jobs overseas.
The economic stakes for the United States are small. The agreement would eventually reduce or eliminate trade tariffs and barriers between the United States, Costa Rica, Guatemala, Nicaragua, Honduras, El Salvador and the Dominican Republic. The region accounts for around 1.4% U.S. global trade, according to World Bank figures.
But the vote was seen having broader implications for ongoing trade negotiations, including the ongoing Doha round of world trade talks. Also, defeat on a major legislative priority could underline Bush's lame-duck status as a second-term president.
House Ways and Means Committee Chairman Bill Thomas, R-Calif., accused Democratic leaders of bullying pro-trade party members into opposing the agreement solely to hand Bush a defeat.
Democrats noted that House Republican leaders and Bush administration officials have been working furiously in recent weeks, making bargains and offering assurances to members of their own caucus in an effort to minimize defections by Republicans from sugar- and textile-producing districts.
Supporters have argued that the pact would help level the U.S. playing field for U.S. manufacturers, noting that around 80% of imports from Cafta nations enter the United States duty-free, while many U.S. exports face trade barriers.
Bush addressed House Republican lawmakers behind closed doors in a rare Capitol visit Wednesday morning. He argued that failure to pass Cafta would undercut progress toward democracy across Central America, House Majority Leader Tom DeLay, R-Texas, told reporters. The president also said the agreement would boost growth in the region, putting a damper on illegal immigration into the United States.
Democrats scoffed, arguing that the North American Free Trade Agreement between the United States, Canada and Mexico had failed to stem illegal immigration from Mexico.
Before taking action on Cafta, the House passed a bill designed to increase scrutiny of China's trade practices.
Republican strategists hoped the measure would help members from manufacturing-heavy districts to support Cafta. Rep. Phil English, R-Pa. -- the measure's sponsor -- agreed to back the trade pact only after House leaders agreed to bring the China bill to the floor for a vote.
Democrats charged that the China measure doesn't go far enough, and that the bill was offered solely to give GOP members from trade-wary districts enough political cover to allow them to vote for Cafta. See earlier story.
